Financial Services Companies Evaluating Their Marketing Budget
The cornerstone of any marketing plan is that it sets SMART goals that are specific, measurable, attainable, realistic and time-bound. Measuring results can take a number of forms; however, financial services companies evaluating their marketing budget should be top of mind.
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Financial Services Companies Evaluating Their Marketing Budget
The cornerstone of any marketing plan is that it sets SMART goals that are specific, measurable, attainable, realistic and time-bound. Measuring results can take a number of forms; however, financial services companies evaluating their marketing budget should be top of mind.
Return on Marketing Investment
A common measurement may be denominated in assets raised or number of new clients. However, you can’t assume all growth comes from your marketing efforts since your business may have organic growth, e.g., client referrals.
For discrete lead generation types of marketing campaigns, like seminars or e-mail communications, results can be measured by means of the Return on Marketing Investment (ROMI) Factor, using the formula below.
ROMI = (Incremental Revenue Attributable to Marketing)/Marketing Spend
For example, assume you conduct quarterly public seminars at a cost of $2,000 for each seminar. You typically gain two new clients from each seminar with average investible assets of $450,000, on which you earn 1 percent in gross revenue. Using the above formula, your seminar would have a ROMI Factor of 4.5, which is arrived at by calculating the incremental revenue of $9,000—or (($450,000 x .01)x2)—and dividing it by $2,000. By comparing the ROMI Factor of each initiative, you can determine which is most effective.
Since branding exercises may have less obvious outcomes, results may be more difficult to measure, making calculations much more complex.
Sales Numbers
Measuring sales may be the most immediate way to gauge the success of marketing initiatives. A simple calculation can allow you to ascertain the amount of sales or assets raised on a per-dollar basis. A formula that can be used is as follows:
Sales per Dollar = Sales Generated/Cost of Marketing
Not all sales generate the same revenues; consequently, they may not be indicative of what efforts generate the most profitable results.
Client Response
Marketing efforts to your current clients can be measured in new assets raised or incremental revenue, but such marketing may deserve a different standard. Perhaps you’re most interested in response rate.
By measuring how many clients clicked on the link in your marketing e-mail or how many clients called to ask for more information, you obtain a valuable insight into
the relevance of a marketing message and the skill with which it was crafted.
Through measurement, financial services companies can continuously refine and experiment with messages to determine what delivers the highest client engagement levels.
In closing, it pays to remember the old management adage, “If you can’t measure something, you can’t manage it.”
See referenced disclosure (2) at https://blog-dev.americanportfolios.com/disclosures/